Block chain is a new technology that many people have been talking
about in the past couple of years. It is described as a “revolution” that could
drastically change the way business is done today, including Supply Chain
processes. That being said, it is important to understand what block chain is
exactly and what it was originally developed for before talking about what
applications it could have for the supply chain industry.

Block chain was originally developed for the “Internet
Money” that you’ve probably heard of by now, Bitcoin. Bitcoin is actually more
of a sort of payment system that records, tracks and allows peer-to-peer
transaction of a “cryptocurrency”. Additionally, anybody can access and review the
data recorded of any transaction. This means that users of this network can verify
and validate where the money “comes from”, execute transactions without passing
through an intermediary, such as a bank, all that with no risk of being
“scammed”. This is enabled by the Block chain protocol, which is a
distributed data base shared by all users (or nodes), where all Bitcoin
transactions are recorded, available for review and protected from editing. For
each new transaction executed from a network member, a new “block,” where the
new transaction’s information is added to the previous block’s records, is
created and saved on the computer executing the new transaction. All to say, all
valuable information can be recorded, tracked, with minimum (to zero) risk of being
hacked.

Extrapolating this to a broader view, it would be possible
to track any information and improve transparency of any kind of transaction of
goods or services. So how does supply chain can really benefit from this new
technology? In my opinion, block chain as it is today is not suited for the
supply chain industry. Block chain as it is developed today mainly aims at
recording currency transactions, with no possibility to hide or delete any of
it. I am not sure a lot of sellers want that kind of transparency and are
necessarily excited about allowing their buyers to have access to “a full and
complete history” behind the production cost of their goods.

However,
the technology can be adapted so that a members of the block chain network can
choose what information to track and record. Easy to say, but it would require
a lot of work! Indeed, it took 8 years from the first introduction of Bitcoin in
2008 to see Block chain technology applied to something other than Bitcoin. Indeed, it took 8 years from the
first introduction of Bitcoin in 2008 to see Block chain technology applied to
something other than Bitcoin. Walmart
partnered with IBM to develop a block chain system to test a packaged
produce item in the U.S. and pork in its Chinese stores. By applying block
chain to its supply chain processes, Walmart intends to improve the way food is
tracked, transported and sold to its customers. It would not only allow Walmart
to better control its products from a safety perspective, but it would also allow
them to reduce spoilage, waste, and ultimately generate savings opportunities.

While some experts view block chain as “a bigger
innovation than Internet itself”, it remains a fairly young technology. The
good news is that experts, programmers, entrepreneurs and investors are seeing
new applications for this technology that can potentially have significant
positive impacts in multiple sectors of across a slew of industries. Solutions
are just being implemented now in sectors, such as the Retail Food Industry,
which is a promising sign for the technology. We are now entering a phase of
“proof of concept” that will, if successful, open doors to a lot of different
applications aside from the one it is mainly known for today, Bitcoin. Stay
tuned!

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